Ituran Location & Control Ltd. — Call Transcript 2025

Ladies and gentlemen, thank you for standing by. My name is Kenny Green, I am part of the Investor Relations team at Ituran. I would like to welcome all of you to Ituran's Result Zoom webinar, and I would like to thank Ituran's management for hosting this call. All participants other than the presenters are currently muted, and following the formal presentation, I'll provide some instructions for participating in the live Q&A session. I would like to remind everyone that this conference call is being recorded, and the recording will be available from the link in the earnings press release and on Ituran's website from tomorrow. With me today on the call are Mr. Eyal Sheratzky CEO, Mr. Udi Mizrahi, Deputy CEO and VP Finance, and Mr. Eli Kamer, CFO of Ituran. Eyal will begin with a summary of the quarter's results, followed by Eli with a summary of the financials. We'll then open the call for the Q&A session. You should have all by now received the company's press release. If not, please view it on the company's website. I'd like to remind everyone that the Safe Harbor statement in today's press release also covers the contents of this conference call and the associated presentation. Eyal, would you like to begin, please? Thank you, Kenny. I'd like to welcome all of you to our Third Quarter 2025 Results Call, and thank you for joining us today. We are very happy with the results of the third quarter, which were strong across all key parameters. In particular, we are very pleased with the revenue growth. We continue to grow, driven by our long-term efforts and success in bringing existing as well as new customer value-adding telematics and connected car product and services. In addition, we are also constantly bringing additional OEM partners to our growing roster, an example of which was Stellantis last quarter, and we are in active discussions with others. Our results show an ongoing expansion across our target geographies in our large subscriber base of over 2.5 million subscribers. In the third quarter, we added 40,000 net subscribers. We are on track to add between 220,000 and 240,000 net new subscribers in 2025, which will represent a very strong year of subscriber growth. We had a good third quarter, and I want to summarize some of our activities, which contribute to our growth and success. We continue to see solid demand for our location-based products and telematics services in all our regions, as well as traction from our new initiative and services. In Israel, the high car theft rate in Israel continued to provide strong demand for our services in the country, and we are reaching additional new subscribers from parts of the market that were previously untapped by us, such as lower-priced new vehicles or the second-hand car market. Our usage-based insurance business in Israel is also seeing good traction and bringing continued strong subscriber growth. In Latin America, we continue to expand our reach. Our new product targeting the motorcycle market is gaining strong traction across South America, especially on the back of our partnership with BMW Motorrad in Brazil. Motorcycles are a significant market opportunity, being the top mode of transportation in many parts of the world. It significantly increased our total addressable market. With Brazil as our starting point, we plan to scale into other high-growth motorcycle markets through partnerships with local OEMs, as well as sales to the aftermarket. Our IturanMob, smart mobility platform, is a unique technology and solution enabling remote vehicle access, real-time telematics, and efficient fleet management for shared mobility and rental fleet applications. IturanMob was launched first in Brazil and has been gaining solid traction here, where it is being adopted by a growing number of fleet operators and rental companies. Based on the strong market interest and success we've seen in Brazil, we are now introducing it to the United States market. We recently established operation for IturanMob in the United States. We have identified a strong need in the U.S. for our solution, particularly among the thousands of small to medium car rental companies, which include hundreds of thousands of cars. These companies could benefit from this type of technological solution, making the rental process more user-friendly and efficient. This creates a new long-term avenue of growth alongside our core telematics and subscriber-based businesses. Ituran generated a high level of cash in the quarter, amounting to $21.3 million in operating cash flow during the quarter. Due to our continued profitability and strong cash generation, we declared a dividend of $10 million to shareholders for the quarter. I remind you that at the end of last year, we increased our dividend policy by 25%, from issuing $8 million per quarter to $10 million per quarter. This represents $0.50 per share. Our dividend yield, on an annualized basis, represents a return of around 5%, which is a very solid return from a strong and stable company. During the quarter, we purchased $1.5 million in shares under our buyback program. As of the end of the quarter, we had around $5.2 million still available under this program. We see our ongoing dividend and buyback as a reward to our shareholders for their loyalty and long-term support of our company. In summary, we remain very pleased with Ituran's performance in the third quarter and, more generally, Ituran's long-term and ongoing performance. At the same time, we look for more avenues to bring further growth to our business across all our regions, and the recent launch of IturanMob is an example for this. We constantly aim to bring new products and services to both existing customers and new customers, as well as partnerships with new OEMs, new financing companies, and other leading companies. 2025 marks 20 years as a public company and 30 years as a company. We look forward to opening the Nasdaq market on Tuesday next week, November 25th, and we thank both the Nasdaq as well as our shareholders for the long-term support of our business. With that, I hand over to Eli. Eli, please go ahead. Thanks, Eyal. I will provide a short summary of the financial results. You can find the more detailed result that we issued in the press release earlier today. Third quarter revenues were $92.3 million, an 11% increase compared with $83.5 million in Q3 of last year. Subscription fees were $67.6 million, up 13% year-over-year, and representing 73% of total revenues. Product revenues were $24.7 million, up 4% year-over-year. Our subscriber base reached 2,588,000 at quarter end, an increase of 40,000 in the quarter. Year-over-year, the subscriber base grew by 219,000. The geographic breakdown of revenues in the third quarter was as follows: Israel 55%, Brazil 23%, rest of world 22%. EBITDA was $24.6 million, 26.7% of revenues, up 6% year-over-year, compared with EBITDA of $23.3 million, 27.9% of revenues in the third quarter of last year. Net income for the third quarter was $14.6 million, or diluted earnings per share of $0.74, an increase of 7% compared to $13.7 million, or diluted earnings per share of $0.69 in the third quarter of last year. Cash flow from operations for the third quarter of 2025 was $21.3 million. As of September 30, 2025, the company had net cash, including marketable securities, of $93.1 million. This is compared with net cash, including marketable securities, of $77.3 million as of year-end 2024. The Board of Directors declared a dividend of $10 million for the quarter. The current dividend takes into account the company's continuing strong profitability, ongoing positive cash flow, and strong balance sheet. During the quarter, we purchased $1.5 million in shares under our buyback program. As of the end of the quarter, we had around $5.2 million available under this program. With that, I'd like to open the call for the Q&A session. Operator. Thank you. At this time, we'll begin the Q&A session. If you have a question, please raise your hand via the Zoom platform. I will introduce you and ask you to unmute, after which you may ask your question. We'll take a few moments to poll for your questions. Our first question will be from Chris Reimer of Barclays. Chris, you may go ahead and ask your question. Hi, thanks for taking my question, and congratulations on the strong results. I was wondering if you could give a little more color on the launch in the U.S. What's the target market? Do you have any idea of how big it is, and when might you expect it to bear fruit? Okay, absolutely. Thank you. Before we decide to go from Brazil directly to the U.S. market, which is, I think, the most luxury market for this kind of solutions, we did a survey, and we got information that in the United States, there are tens of thousands of rental companies. It's true that about five of them are representing more than 60% of the market, and these are the big names. At the first and the beginning, we are not aiming them as our segment. The other represent hundreds of thousands of rental cars. We are talking about small and medium rental companies from one family that holds 10 or 15 cars that they are rented, or some mid-companies with 100, 200, 300 cars. All of them are local. All of them are, or most of them are not nationwide. They have a very strong demand for a solution that, first of all, will allow them to save their cost. I will explain. In order today, for a business that has 20-30 cars to meet the customers, they have to go and meet each customer, give him the key of the car, then bring it back. It requires drivers. It requires service. In the worst case, they have to open an office, put a desk, put the people, put software, etc. When you have 20-30 cars, it is a dramatically high expense, and it is dramatically lowering the chance to make money from your rental company. What we provide is that you do not have to do almost anything except having the cars. Because everything done on the streets, everything done that you have a dashboard as a rental company owner, small rental company owner, and you can know every minute what is with the cars, who is driving the car, how much money this car will provide you. That is done by having a smart key in the car, having the system that we developed through IturanMob, our small subsidiary for this technology and innovation. In Brazil, by the way, we do it for almost three years. It is a very successful solution. Add to this that even in Israel, the largest leasing and rental company in Israel, Shlomo lease car, changed a technology that they found in the world because we did not have it in the past to our technology. It threw to the garbage about 2,000 hardwares that they paid and installed in his rental cars. We are the partners, and our units and services are also in Israel. I'm talking about the U.S. because Israel, by definition, is a small market. It's maybe attractive, but it's not having a major influence on our future results. The U.S. market, and it's important to mention, we are, I think, the first. I mean, we heard or we know about companies that tried. They have a very not the same technology. Let's be, I don't want to be arrogant. When they tried, the technology didn't work. They tried to do it in one small city. There are not really big technology or communication players that develop or represent it to the U.S. market. We are in the beginning of this industry, I would say, in the States. There are companies dealing with remote rentals, but not the renting the car itself. There are companies that provide services to rental companies, like integrators, software companies. That's good. This is, by the way, it's an advantage for us because we can partner with them. Before we do it, we have a solution which we can go independently by ourselves. We already have pilots in the area of Orlando and New York with some small rental companies that are very satisfied. The response that we get is very, very good. I'm saying it's not something that will happen tomorrow. We are opening a new, I think, a new niche, a new segment, a new market. It's also required adaptations. I think that, let's say, the dream here is huge. Got it. Got it. Thanks. That's really great color. Maybe just touching on OpEx, what was driving the increase in operating expenses this quarter, and how should we be looking at margin expansion into next year? If we are talking about the increase in the OpEx, the big majority of it is coming from the FX effect. That, of course, increased the absolute numbers of the OpEx. If we are talking about the margins, again, I do not see any reason that as long as we continue to increase our subscriber base, and this is exactly according to the guideline, and I am assuming next year the same, that the margins will increase as well. Got it. Thank you. Maybe if I could just one more. How do you feel the subscriber momentum is performing versus your original guidance for the year? Can you give any color on where you're seeing the most traction? As I said in my speech, is that we provide kind of guidance of 220,000-240,000. According to the nine months and the current data that we have, is that we will meet this range, which is the highest, I think, ever in the 30 years of Ituran. The drivers are absolutely across all the regions. It's included also from the OEM. It's included the aftermarket that we do in Brazil, which is including the insurance companies. It's also including the financial solution that we provide to banks. Also, with a very major influence on the subscribers that we add during 2025 is Israel. This is thanks to the requirement by insurance companies. Relatively to the cost of rate is very high. More and more new cars, but more important is second-hand cars that in the past did not require for the policy security system. Now they require. Ituran is the first choice in Israel by far of any other security solution. This allows us to grow in 2025 dramatically as well in Israel. I will add that the UBI also has some volatility. In 2023, we did a very high growth in subscribers. In 2024, we had to expand the customers that we are approaching. In 2025, we had another large insurance company that we developed for them a solution. They also, during the second quarter of 2025, start using our UBI solution in high numbers. Overall, this is the drivers. Great. Great. Thanks. That's it for me, guys. Thank you. Thanks, Chris. Our next question is going to be from Allen Klee of Maxim Group. Allen, you may go ahead and ask. Yes. Hi. Can you hear me? Yes. Yes. Oh, great. You talked about how motorcycles are important in South America and your partnership with BMW Motorrad. What are you, could you talk about kind of how you're looking at increasing the uptake in this market? Yes. Brazil, and especially, but also the rest of Latin America, is a very motorcycles. I'm talking about mid-to-heavy engine motorcycles, which is quite an expensive vehicle, is very popular. The ratio between four-wheel drive and two-wheel drive, it's very different than, for example, in other countries in the Western world, many people using motorcycles. Ituran always has a solution, but our solution was a little bit, I would say, not reliable enough to provide insurance companies with a low premium to motorcycles. This is first. Second, even the motorcycles themselves were in a situation that they didn't want to add cost to the motorcycles. In the last two years, we developed, thanks to our innovative teams, a unit which is state-of-the-art for a security system and application for the driver on a motorbike. What we did first, we used our OEM capabilities and teams, and we started negotiating. As you remember, maybe the first one was with Yamaha. Yamaha is our first customer for almost two years, 18 months. Now, as we publish, we signed an OEM deal with BMW Motorrad in Brazil. The idea is that this is an untapped market for telematics solutions. We are talking about the potential of millions of motorbikes that fit these needs and can pay it compared to the price of the motorbike. We started with an OEM. This allows us to create reliability. This allows us to partner with brands. The guys of motorbikes are like sports cars. If somebody is driving a BMW, you will be very loyal. The same Honda, Yamaha, etc., specifically in Brazil. We knew that partnering with a big brand in the OEM will, again, provide reliability. Now what we see is attraction also from the aftermarket. Because if someone comes to a dealer of BMW to have some treatment to the motorbike or to buy something, now he's asking or he will see that there is a solution by Ituran. We really believe that we just started. I am expecting that it will bring us tens of thousands of new subscribers starting 2026. It will grow as we will expand the segment and our customer, whether it will be B2B with other motorbike manufacturers. There are other names that we are starting to talk with. I'm not saying whether it will finish with a deal or not, but we see attraction. A major portion of this market is the second market, the aftermarket. This is something, again, that I believe can be very important with influence, again, on the results in two to three years from now. Thank you. I understand that Israel is an attractive market, but not that large. You have a large opportunity in Latin America and South America. How do you think about, first, the size of the opportunity in South America? Also, is it possible over the next couple of years that there could be other geographies that might make sense? First of all, we are not passing any opportunity. By talking about how we focus, the Latin America market, whether it's Central or South America, it's a huge market, which is, by the way, kind of an emerging market. There is still a growing segment that we couldn't penetrate, whether it's because of price, whether it's because of awareness. For us, the first online is to expand and continue expanding our business in Latin America because of the synergy that we can create, the relationship, the brand. We're still, I think, in the beginning of tapping this market. This is regarding how we focus, but in an opportunistic way. Of course, when we look at the rest of the world, we are more looking at doing it by M&A, by acquisition. Because for us to start a new business from scratch, for example, in the U.K. or in Europe, it will require high resources because we have zero resources now there. Until the moment that we will turn it to major revenues and major profits, it will take a long time. At the size of Ituran, the way that we are looking at other geographies is by M&A. Of course, we are looking. It should be something that meets our DNA, meets our criteria. Our criteria is not a too small company. On the other end, a company that has assets that we can leverage, such as partners or customers, a system of employees, control centers, etc. To make the long story short, we still focus on Latin America and in the U.S., as I said. Okay. Thank you very much. You're welcome. Thank you, Allen. Our next question will be from Sergey Glinyanov from Freedom Capital Markets. Sergey, please go ahead. Good morning, Eyal, Udi, Eli. Can you hear me? Yes. Yeah. Yeah, yeah. Great. Great. First of all, my applause to Ituran and another successful quarter. You guys beat market expectations. It was not revenue in EPS. Now I am interested in revenue dynamics. It seems your ARPU is increasing. Is it basically a product and service mix or something more fundamental as a core? Hi, Sergey. ARPU is going up due to the fact of the FX. FX has been better in Q3 this year. Therefore, the ARPU went up as well. Okay. And some kind of follow-up about your IturanMob in North America. Do you have any expectations about revenue next year? We never provide guidance about revenues. I must tell you that we do all we can to make more revenues than this year. Yeah. Sounds great. Thank you. You're welcome. Thank you. Thanks, Sergey. Our next question, hold on one sec. Our next question will be from Evan Tindell of Bireme Capital. Evan, you may ask your question. Hi, guys. Thanks for taking my call. My question is, I've heard that some theft insurance providers in Israel are not requiring Teslas to have your system. I was just wondering, is that true? A follow-up to that is, over 10, over like five to 10, 15 years, something like that, do you guys worry that more manufacturers will be able to sort of figure out how to do the internal telematic systems and anti-theft systems well enough to disintermediate you guys? Thanks so much. Okay. Just to explain how the process is specifically in Israel, because there is a regulation, in Israel, an insurance company cannot decide for their insurers or require in their policy a specific brand, a specific solution. What they allow to do is, for example, if they want to have a location unit with a real-time alert, with a 24/7 control center, that is what they put in the policy. Now, you as the insurer have to decide what company you choose. Never, never since the inception of Ituran, insurance companies did not say, "Install Ituran" or "Install other name." This is what is nice with Ituran. We are not the chosen of the insurance company. We are the chosen of a million subscribers in Israel. This is what the story is. How we do it is with our channels. The channels, in that case, are car dealers, car importers. Just to remind you, in Israel, there are no manufacturers. In Israel, there are car importers which represent manufacturers. Ituran has a very strong partnership relationship along the years. This is the reason why 20 years ago, Ituran was declared as a monopoly in the telematics business in Israel. This is why I can say and publish that Ituran has something like 85%-90% market share. It's saying that 10% of the industry is by other companies. For us, it's good. We have competition, but we lead the competition very, very strongly. This is regarding this question. Regarding the second question, as we proved in the OEM business in Latin America, and General Motors is a very good example. Historically, we started by selling hardware and services. Ituran always was built on a recurring revenue. Always, we were built as a service-oriented company. For us, the hardware in the car is a tool. It's a tool to bring customers. I would say our gold medal is to have a customer for many years paying every month. For that, we don't need the hardware. We need, yes, we need a car manufacturer or in Israel, a car dealer or a shop to say, "Okay, I'm selling a car with a telematics solution, but the company that can provide the services." For example, when we talk about SVR, this is the market that we are very active, Israel, Latin America, very hostile environments. No technology will recover the car. The recovery of the car is done by people sitting in a control center, providing information to enforcement people on the field. We have intelligence. We have drones. Those things are aside from the technology. As long as we can sell, and specifically in the emerging market, our technology is the state of the art. The companies, for example, that sell cars in Israel, even the Chinese companies, they are not providing communication telematic solutions, for example, in Hebrew. They are not providing the data that's relevant. They will not immigrate it for those small markets. On the other hand, in Brazil and in Mexico, we are connecting to those manufacturers from the first level. I think that for us, it's more important to provide the service to have the recurring revenues. Today, 95% of our customers, which are car dealers, car manufacturers, and any other customers, still buy our hardware. There are a few percent who choose their own hardware. For us, it's okay. For us, it's okay. It may grow, this percentage will grow, I agree with you, in the next decade. But still, it's not something that we see as aiming the business of Ituran. Great. Thank you for that. One other question. Could you update us on your efforts in India? I didn't talk about India today specifically because there were a few quarters that I mentioned this joint venture that we have in India. Since this growing market is very, very, very slow, I didn't find a reason to repeat things that I said in the past. For you, I can say we have a joint venture in India. We signed a large contract with Mercedes-Benz for commercial cars, but with low margins. The current problem in India is that the market is premature. The financial capabilities of businesses, as well as retail, are very low. We have to find very specific deals to make money. India is for the long term. India has a lot of potential, as we see it, for the future. We are the main telematics or one of the main telematics players that are on the ground. Okay. Thank you. Thanks, Evan. That will end our question and answer session. Eyal, if you would like to go make your concluding statement. On behalf of the management of Ituran, I would like to thank you, our shareholders, for your continued interest and long-term support of our business. We look forward to continuing our accomplishments over the next decade. If you are interested in meeting or speaking with us, feel free to reach out to our investor relations team. We end our call. Thank you and have a good day.

Speaker 1: Ladies and gentlemen, thank you for standing by. My name is Kenny Green, I am part of the Investor Relations team at Ituran. I would like to welcome all of you to Ituran's Result Zoom webinar, and I would like to thank Ituran's management for hosting this call. All participants other than the presenters are currently muted, and following the formal presentation, I'll provide some instructions for participating in the live Q&A session. I would like to remind everyone that this conference call is being recorded, and the recording will be available from the link in the earnings press release and on Ituran's website from tomorrow. With me today on the call are Mr. Eyal Sheratzky CEO, Mr. Udi Mizrahi, Deputy CEO and VP Finance, and Mr. Eli Kamer, CFO of Ituran. Ladies and gentlemen, thank you for standing by. ladies and gentlemen thank you for standing by My name is Kenny Green, I am part of the Investor Relations team at Ituran. my name is kenny green i am part of the investor relations team at ituran I would like to welcome all of you to Ituran's Result Zoom webinar, and I would like to thank Ituran's management for hosting this call. i would like to welcome all of you to ituran's result zoom webinar and i would like to thank ituran's management for hosting this call All participants other than the presenters are currently muted, and following the formal presentation, I'll provide some instructions for participating in the live Q&A session. all participants other than the presenters are currently muted and following the formal presentation i'll provide some instructions for participating in the live q&a session I would like to remind everyone that this conference call is being recorded, and the recording will be available from the link in the earnings press release and on Ituran's website from tomorrow. i would like to remind everyone that this conference call is being recorded and the recording will be available from the link in the earnings press release and on ituran's website from tomorrow With me today on the call are Mr. Eyal Sheratzky CEO, Mr. Udi Mizrahi, Deputy CEO and VP Finance, and Mr. Eli Kamer, CFO of Ituran. with me today on the call are mr eyal sheratzky ceo mr udi mizrahi deputy ceo and vp finance and mr eli kamer cfo of ituran Eyal will begin with a summary of the quarter's results, followed by Eli with a summary of the financials. We'll then open the call for the Q&A session. You should have all by now received the company's press release. If not, please view it on the company's website. I'd like to remind everyone that the Safe Harbor statement in today's press release also covers the contents of this conference call and the associated presentation. Eyal, would you like to begin, please? Eyal will begin with a summary of the quarter's results, followed by Eli with a summary of the financials. eyal will begin with a summary of the quarter's results followed by eli with a summary of the financials We'll then open the call for the Q&A session. we'll then open the call for the q&a session You should have all by now received the company's press release. you should have all by now received the company's press release If not, please view it on the company's website. if not please view it on the company's website I'd like to remind everyone that the Safe Harbor statement in today's press release also covers the contents of this conference call and the associated presentation. i'd like to remind everyone that the safe harbor statement in today's press release also covers the contents of this conference call and the associated presentation Eyal, would you like to begin, please? eyal would you like to begin please

Speaker 6: Thank you, Kenny. I'd like to welcome all of you to our Third Quarter 2025 Results Call, and thank you for joining us today. We are very happy with the results of the third quarter, which were strong across all key parameters. In particular, we are very pleased with the revenue growth. We continue to grow, driven by our long-term efforts and success in bringing existing as well as new customer value-adding telematics and connected car product and services. In addition, we are also constantly bringing additional OEM partners to our growing roster, an example of which was Stellantis last quarter, and we are in active discussions with others. Our results show an ongoing expansion across our target geographies in our large subscriber base of over 2.5 million subscribers. In the third quarter, we added 40,000 net subscribers. Thank you, Kenny. thank you kenny I'd like to welcome all of you to our Third Quarter 2025 Results Call, and thank you for joining us today. i'd like to welcome all of you to our third quarter 2025 results call and thank you for joining us today We are very happy with the results of the third quarter, which were strong across all key parameters. we are very happy with the results of the third quarter which were strong across all key parameters In particular, we are very pleased with the revenue growth. in particular we are very pleased with the revenue growth We continue to grow, driven by our long-term efforts and success in bringing existing as well as new customer value-adding telematics and connected car product and services. we continue to grow driven by our long-term efforts and success in bringing existing as well as new customer value-adding telematics and connected car product and services In addition, we are also constantly bringing additional OEM partners to our growing roster, an example of which was Stellantis last quarter, and we are in active discussions with others. in addition we are also constantly bringing additional oem partners to our growing roster an example of which was stellantis last quarter and we are in active discussions with others Our results show an ongoing expansion across our target geographies in our large subscriber base of over 2.5 million subscribers. our results show an ongoing expansion across our target geographies in our large subscriber base of over 2.5 million subscribers In the third quarter, we added 40,000 net subscribers. in the third quarter we added 40,000 net subscribers We are on track to add between 220,000 and 240,000 net new subscribers in 2025, which will represent a very strong year of subscriber growth. We had a good third quarter, and I want to summarize some of our activities, which contribute to our growth and success. We continue to see solid demand for our location-based products and telematics services in all our regions, as well as traction from our new initiative and services. In Israel, the high car theft rate in Israel continued to provide strong demand for our services in the country, and we are reaching additional new subscribers from parts of the market that were previously untapped by us, such as lower-priced new vehicles or the second-hand car market. Our usage-based insurance business in Israel is also seeing good traction and bringing continued strong subscriber growth. In Latin America, we continue to expand our reach. We are on track to add between 220,000 and 240,000 net new subscribers in 2025, which will represent a very strong year of subscriber growth. we are on track to add between 220,000 and 240,000 net new subscribers in 2025 which will represent a very strong year of subscriber growth We had a good third quarter, and I want to summarize some of our activities, which contribute to our growth and success. we had a good third quarter and i want to summarize some of our activities which contribute to our growth and success We continue to see solid demand for our location-based products and telematics services in all our regions, as well as traction from our new initiative and services. we continue to see solid demand for our location-based products and telematics services in all our regions as well as traction from our new initiative and services In Israel, the high car theft rate in Israel continued to provide strong demand for our services in the country, and we are reaching additional new subscribers from parts of the market that were previously untapped by us, such as lower-priced new vehicles or the second-hand car market. in israel the high car theft rate in israel continued to provide strong demand for our services in the country and we are reaching additional new subscribers from parts of the market that were previously untapped by us such as lower-priced new vehicles or the second-hand car market Our usage-based insurance business in Israel is also seeing good traction and bringing continued strong subscriber growth. our usage-based insurance business in israel is also seeing good traction and bringing continued strong subscriber growth In Latin America, we continue to expand our reach. in latin america we continue to expand our reach Our new product targeting the motorcycle market is gaining strong traction across South America, especially on the back of our partnership with BMW Motorrad in Brazil. Motorcycles are a significant market opportunity, being the top mode of transportation in many parts of the world. It significantly increased our total addressable market. With Brazil as our starting point, we plan to scale into other high-growth motorcycle markets through partnerships with local OEMs, as well as sales to the aftermarket. Our IturanMob, smart mobility platform, is a unique technology and solution enabling remote vehicle access, real-time telematics, and efficient fleet management for shared mobility and rental fleet applications. IturanMob was launched first in Brazil and has been gaining solid traction here, where it is being adopted by a growing number of fleet operators and rental companies. Our new product targeting the motorcycle market is gaining strong traction across South America, especially on the back of our partnership with BMW Motorrad in Brazil. our new product targeting the motorcycle market is gaining strong traction across south america especially on the back of our partnership with bmw motorrad in brazil Motorcycles are a significant market opportunity, being the top mode of transportation in many parts of the world. motorcycles are a significant market opportunity being the top mode of transportation in many parts of the world It significantly increased our total addressable market. it significantly increased our total addressable market With Brazil as our starting point, we plan to scale into other high-growth motorcycle markets through partnerships with local OEMs, as well as sales to the aftermarket. with brazil as our starting point we plan to scale into other high-growth motorcycle markets through partnerships with local oems as well as sales to the aftermarket Our Ituran Mob, smart mobility platform, is a unique technology and solution enabling remote vehicle access, real-time telematics, and efficient fleet management for shared mobility and rental fleet applications. our ituran mob smart mobility platform is a unique technology and solution enabling remote vehicle access real-time telematics and efficient fleet management for shared mobility and rental fleet applications Ituran Mob was launched first in Brazil and has been gaining solid traction here, where it is being adopted by a growing number of fleet operators and rental companies. ituran mob was launched first in brazil and has been gaining solid traction here where it is being adopted by a growing number of fleet operators and rental companies Based on the strong market interest and success we've seen in Brazil, we are now introducing it to the United States market. We recently established operation for IturanMob in the United States. We have identified a strong need in the U.S. for our solution, particularly among the thousands of small to medium car rental companies, which include hundreds of thousands of cars. These companies could benefit from this type of technological solution, making the rental process more user-friendly and efficient. This creates a new long-term avenue of growth alongside our core telematics and subscriber-based businesses. Ituran generated a high level of cash in the quarter, amounting to $21.3 million in operating cash flow during the quarter. Due to our continued profitability and strong cash generation, we declared a dividend of $10 million to shareholders for the quarter. Based on the strong market interest and success we've seen in Brazil, we are now introducing it to the United States market. based on the strong market interest and success we've seen in brazil we are now introducing it to the united states market We recently established operation for Ituran Mob in the United States. we recently established operation for ituran mob in the united states We have identified a strong need in the U.S. for our solution, particularly among the thousands of small to medium car rental companies, which include hundreds of thousands of cars. we have identified a strong need in the u.s for our solution particularly among the thousands of small to medium car rental companies which include hundreds of thousands of cars These companies could benefit from this type of technological solution, making the rental process more user-friendly and efficient. these companies could benefit from this type of technological solution making the rental process more user-friendly and efficient This creates a new long-term avenue of growth alongside our core telematics and subscriber-based businesses. this creates a new long-term avenue of growth alongside our core telematics and subscriber-based businesses Ituran generated a high level of cash in the quarter, amounting to $21.3 million in operating cash flow during the quarter. ituran generated a high level of cash in the quarter amounting to $21.3 million in operating cash flow during the quarter Due to our continued profitability and strong cash generation, we declared a dividend of $10 million to shareholders for the quarter. due to our continued profitability and strong cash generation we declared a dividend of $10 million to shareholders for the quarter I remind you that at the end of last year, we increased our dividend policy by 25%, from issuing $8 million per quarter to $10 million per quarter. This represents $0.50 per share. Our dividend yield, on an annualized basis, represents a return of around 5%, which is a very solid return from a strong and stable company. During the quarter, we purchased $1.5 million in shares under our buyback program. As of the end of the quarter, we had around $5.2 million still available under this program. We see our ongoing dividend and buyback as a reward to our shareholders for their loyalty and long-term support of our company. In summary, we remain very pleased with Ituran's performance in the third quarter and, more generally, Ituran's long-term and ongoing performance. I remind you that at the end of last year, we increased our dividend policy by 25%, from issuing $8 million per quarter to $10 million per quarter. i remind you that at the end of last year we increased our dividend policy by 25% from issuing $8 million per quarter to $10 million per quarter This represents $0.50 per share. this represents $0.50 per share Our dividend yield, on an annualized basis, represents a return of around 5%, which is a very solid return from a strong and stable company. our dividend yield on an annualized basis represents a return of around 5% which is a very solid return from a strong and stable company During the quarter, we purchased $1.5 million in shares under our buyback program. during the quarter we purchased $1.5 million in shares under our buyback program As of the end of the quarter, we had around $5.2 million still available under this program. as of the end of the quarter we had around $5.2 million still available under this program We see our ongoing dividend and buyback as a reward to our shareholders for their loyalty and long-term support of our company. we see our ongoing dividend and buyback as a reward to our shareholders for their loyalty and long-term support of our company In summary, we remain very pleased with Ituran's performance in the third quarter and, more generally, Ituran's long-term and ongoing performance. in summary we remain very pleased with ituran's performance in the third quarter and more generally ituran's long-term and ongoing performance At the same time, we look for more avenues to bring further growth to our business across all our regions, and the recent launch of IturanMob is an example for this. We constantly aim to bring new products and services to both existing customers and new customers, as well as partnerships with new OEMs, new financing companies, and other leading companies. 2025 marks 20 years as a public company and 30 years as a company. We look forward to opening the Nasdaq market on Tuesday next week, November 25th, and we thank both the Nasdaq as well as our shareholders for the long-term support of our business. With that, I hand over to Eli. Eli, please go ahead. At the same time, we look for more avenues to bring further growth to our business across all our regions, and the recent launch of Ituran Mob is an example for this. at the same time we look for more avenues to bring further growth to our business across all our regions and the recent launch of ituran mob is an example for this We constantly aim to bring new products and services to both existing customers and new customers, as well as partnerships with new OEMs, new financing companies, and other leading companies. 2025 marks 20 years as a public company and 30 years as a company. we constantly aim to bring new products and services to both existing customers and new customers as well as partnerships with new oems new financing companies and other leading companies 2025 marks 20 years as a public company and 30 years as a company We look forward to opening the Nasdaq market on Tuesday next week, November 25th, and we thank both the Nasdaq as well as our shareholders for the long-term support of our business. we look forward to opening the nasdaq market on tuesday next week november 25th and we thank both the nasdaq as well as our shareholders for the long-term support of our business With that, I hand over to Eli. with that i hand over to eli Eli, please go ahead. eli please go ahead

Speaker 3: Thanks, Eyal. I will provide a short summary of the financial results. You can find the more detailed result that we issued in the press release earlier today. Third quarter revenues were $92.3 million, an 11% increase compared with $83.5 million in Q3 of last year. Subscription fees were $67.6 million, up 13% year-over-year, and representing 73% of total revenues. Product revenues were $24.7 million, up 4% year-over-year. Our subscriber base reached 2,588,000 at quarter end, an increase of 40,000 in the quarter. Year-over-year, the subscriber base grew by 219,000. The geographic breakdown of revenues in the third quarter was as follows: Israel 55%, Brazil 23%, rest of world 22%. EBITDA was $24.6 million, 26.7% of revenues, up 6% year-over-year, compared with EBITDA of $23.3 million, 27.9% of revenues in the third quarter of last year. Thanks, Eyal. thanks eyal I will provide a short summary of the financial results. i will provide a short summary of the financial results You can find the more detailed result that we issued in the press release earlier today. you can find the more detailed result that we issued in the press release earlier today Third quarter revenues were $92.3 million, an 11% increase compared with $83.5 million in Q3 of last year. third quarter revenues were $92.3 million an 11% increase compared with $83.5 million in q3 of last year Subscription fees were $67.6 million, up 13% year- over- year, and representing 73% of total revenues. subscription fees were $67.6 million up 13% year- over- year and representing 73% of total revenues Product revenues were $24.7 million, up 4% year- over- year. product revenues were $24.7 million up 4% year- over- year Our subscriber base reached 2,588,000 at quarter end, an increase of 40,000 in the quarter. our subscriber base reached 2,588,000 at quarter end an increase of 40,000 in the quarter Year- over- year, the subscriber base grew by 219,000. year- over- year the subscriber base grew by 219,000 The geographic breakdown of revenues in the third quarter was as follows: Israel 55%, Brazil 23%, rest of world 22%. the geographic breakdown of revenues in the third quarter was as follows israel 55% brazil 23% rest of world 22% EBITDA was $24.6 million, 26.7% of revenues, up 6% year- over- year, compared with EBITDA of $23.3 million, 27.9% of revenues in the third quarter of last year. ebitda was $24.6 million 26.7% of revenues up 6% year- over- year compared with ebitda of $23.3 million 27.9% of revenues in the third quarter of last year Net income for the third quarter was $14.6 million, or diluted earnings per share of $0.74, an increase of 7% compared to $13.7 million, or diluted earnings per share of $0.69 in the third quarter of last year. Cash flow from operations for the third quarter of 2025 was $21.3 million. As of September 30, 2025, the company had net cash, including marketable securities, of $93.1 million. This is compared with net cash, including marketable securities, of $77.3 million as of year-end 2024. The Board of Directors declared a dividend of $10 million for the quarter. The current dividend takes into account the company's continuing strong profitability, ongoing positive cash flow, and strong balance sheet. During the quarter, we purchased $1.5 million in shares under our buyback program. As of the end of the quarter, we had around $5.2 million available under this program. Net income for the third quarter was $14.6 million, or diluted earnings per share of $0.74, an increase of 7% compared to $13.7 million, or diluted earnings per share of $0.69 in the third quarter of last year. net income for the third quarter was $14.6 million or diluted earnings per share of $0.74 an increase of 7% compared to $13.7 million or diluted earnings per share of $0.69 in the third quarter of last year Cash flow from operations for the third quarter of 2025 was $21.3 million. cash flow from operations for the third quarter of 2025 was $21.3 million As of September 30, 2025, the company had net cash, including marketable securities, of $93.1 million. as of september 30 2025 the company had net cash including marketable securities of $93.1 million This is compared with net cash, including marketable securities, of $77.3 million as of year-end 2024. this is compared with net cash including marketable securities of $77.3 million as of year-end 2024 The Board of Directors declared a dividend of $10 million for the quarter. the board of directors declared a dividend of $10 million for the quarter The current dividend takes into account the company's continuing strong profitability, ongoing positive cash flow, and strong balance sheet. the current dividend takes into account the company's continuing strong profitability ongoing positive cash flow and strong balance sheet During the quarter, we purchased $1.5 million in shares under our buyback program. during the quarter we purchased $1.5 million in shares under our buyback program As of the end of the quarter, we had around $5.2 million available under this program. as of the end of the quarter we had around $5.2 million available under this program With that, I'd like to open the call for the Q&A session. Operator. With that, I'd like to open the call for the Q&A session. with that i'd like to open the call for the q&a session Operator. operator

Speaker 7: Thank you. At this time, we'll begin the Q&A session. If you have a question, please raise your hand via the Zoom platform. I will introduce you and ask you to unmute, after which you may ask your question. We'll take a few moments to poll for your questions. Thank you. thank you At this time, we'll begin the Q&A session. at this time we'll begin the q&a session If you have a question, please raise your hand via the Zoom platform. if you have a question please raise your hand via the zoom platform I will introduce you and ask you to unmute, after which you may ask your question. i will introduce you and ask you to unmute after which you may ask your question We'll take a few moments to poll for your questions. we'll take a few moments to poll for your questions Our first question will be from Chris Reimer of Barclays. Chris, you may go ahead and ask your question. Our first question will be from Chris Reimer of Barclays. our first question will be from chris reimer of barclays Chris, you may go ahead and ask your question. chris you may go ahead and ask your question

Speaker 8: Hi, thanks for taking my question, and congratulations on the strong results. I was wondering if you could give a little more color on the launch in the U.S. What's the target market? Do you have any idea of how big it is, and when might you expect it to bear fruit? Hi, thanks for taking my question, and congratulations on the strong results. hi thanks for taking my question and congratulations on the strong results I was wondering if you could give a little more color on the launch in the U.S. i was wondering if you could give a little more color on the launch in the u.s What's the target market? what's the target market Do you have any idea of how big it is, and when might you expect it to bear fruit? do you have any idea of how big it is and when might you expect it to bear fruit

Speaker 6: Okay, absolutely. Thank you. Before we decide to go from Brazil directly to the U.S. market, which is, I think, the most luxury market for this kind of solutions, we did a survey, and we got information that in the United States, there are tens of thousands of rental companies. It's true that about five of them are representing more than 60% of the market, and these are the big names. At the first and the beginning, we are not aiming them as our segment. The other represent hundreds of thousands of rental cars. We are talking about small and medium rental companies from one family that holds 10 or 15 cars that they are rented, or some mid-companies with 100, 200, 300 cars. All of them are local. All of them are, or most of them are not nationwide. Okay, absolutely. okay absolutely Thank you. thank you Before we decide to go from Brazil directly to the U.S. market, which is, I think, the most luxury market for this kind of solutions, we did a survey, and we got information that in the United States, there are tens of thousands of rental companies. before we decide to go from brazil directly to the u.s market which is i think the most luxury market for this kind of solutions we did a survey and we got information that in the united states there are tens of thousands of rental companies It's true that about five of them are representing more than 60% of the market, and these are the big names. it's true that about five of them are representing more than 60% of the market and these are the big names At the first and the beginning, we are not aiming them as our segment. at the first and the beginning we are not aiming them as our segment The other represent hundreds of thousands of rental cars. the other represent hundreds of thousands of rental cars We are talking about small and medium rental companies from one family that holds 10 or 15 cars that they are rented, or some mid-companies with 100, 200, 300 cars. we are talking about small and medium rental companies from one family that holds 10 or 15 cars that they are rented or some mid-companies with 100 200 300 cars All of them are local. all of them are local All of them are, or most of them are not nationwide. all of them are or most of them are not nationwide They have a very strong demand for a solution that, first of all, will allow them to save their cost. I will explain. In order today, for a business that has 20-30 cars to meet the customers, they have to go and meet each customer, give him the key of the car, then bring it back. It requires drivers. It requires service. In the worst case, they have to open an office, put a desk, put the people, put software, etc. When you have 20-30 cars, it is a dramatically high expense, and it is dramatically lowering the chance to make money from your rental company. What we provide is that you do not have to do almost anything except having the cars. They have a very strong demand for a solution that, first of all, will allow them to save their cost. they have a very strong demand for a solution that first of all will allow them to save their cost I will explain. i will explain In order today, for a business that has 20-30 cars to meet the customers, they have to go and meet each customer, give him the key of the car, then bring it back. in order today for a business that has 20-30 cars to meet the customers they have to go and meet each customer give him the key of the car then bring it back It requires drivers. it requires drivers It requires service. it requires service In the worst case, they have to open an office, put a desk, put the people, put software, etc. When you have 20-30 cars, it is a dramatically high expense, and it is dramatically lowering the chance to make money from your rental company. in the worst case they have to open an office put a desk put the people put software etc when you have 20-30 cars it is a dramatically high expense and it is dramatically lowering the chance to make money from your rental company What we provide is that you do not have to do almost anything except having the cars. what we provide is that you do not have to do almost anything except having the cars Because everything done on the streets, everything done that you have a dashboard as a rental company owner, small rental company owner, and you can know every minute what is with the cars, who is driving the car, how much money this car will provide you. That is done by having a smart key in the car, having the system that we developed through IturanMob, our small subsidiary for this technology and innovation. In Brazil, by the way, we do it for almost three years. It is a very successful solution. Add to this that even in Israel, the largest leasing and rental company in Israel, Shlomo lease car, changed a technology that they found in the world because we did not have it in the past to our technology. It threw to the garbage about 2,000 hardwares that they paid and installed in his rental cars. Because everything done on the streets, everything done that you have a dashboard as a rental company owner, small rental company owner, and you can know every minute what is with the cars, who is driving the car, how much money this car will provide you. because everything done on the streets everything done that you have a dashboard as a rental company owner small rental company owner and you can know every minute what is with the cars who is driving the car how much money this car will provide you That is done by having a smart key in the car, having the system that we developed through Ituran Mob, our small subsidiary for this technology and innovation. that is done by having a smart key in the car having the system that we developed through ituran mob our small subsidiary for this technology and innovation In Brazil, by the way, we do it for almost three years. It is a very successful solution. in brazil by the way we do it for almost three years. it is a very successful solution Add to this that even in Israel, the largest leasing and rental company in Israel, Shlomo lease car, changed a technology that they found in the world because we did not have it in the past to our technology. add to this that even in israel the largest leasing and rental company in israel shlomo lease car changed a technology that they found in the world because we did not have it in the past to our technology It threw to the garbage about 2,000 hardwares that they paid and installed in his rental cars. it threw to the garbage about 2,000 hardwares that they paid and installed in his rental cars We are the partners, and our units and services are also in Israel. I'm talking about the U.S. because Israel, by definition, is a small market. It's maybe attractive, but it's not having a major influence on our future results. The U.S. market, and it's important to mention, we are, I think, the first. I mean, we heard or we know about companies that tried. They have a very not the same technology. Let's be, I don't want to be arrogant. When they tried, the technology didn't work. They tried to do it in one small city. There are not really big technology or communication players that develop or represent it to the U.S. market. We are in the beginning of this industry, I would say, in the States. There are companies dealing with remote rentals, but not the renting the car itself. We are the partners, and our units and services are also in Israel. we are the partners and our units and services are also in israel I'm talking about the U.S. because Israel, by definition, is a small market. i'm talking about the u.s because israel by definition is a small market It's maybe attractive, but it's not having a major influence on our future results. it's maybe attractive but it's not having a major influence on our future results The U.S. market, and it's important to mention, we are, I think, the first. the u.s market and it's important to mention we are i think the first I mean, we heard or we know about companies that tried. i mean we heard or we know about companies that tried They have a very not the same technology. they have a very not the same technology Let's be, I don't want to be arrogant. let's be i don't want to be arrogant When they tried, the technology didn't work. when they tried the technology didn't work They tried to do it in one small city. they tried to do it in one small city There are not really big technology or communication players that develop or represent it to the U.S. market. there are not really big technology or communication players that develop or represent it to the u.s market We are in the beginning of this industry, I would say, in the States. we are in the beginning of this industry i would say in the states There are companies dealing with remote rentals, but not the renting the car itself. there are companies dealing with remote rentals but not the renting the car itself There are companies that provide services to rental companies, like integrators, software companies. That's good. This is, by the way, it's an advantage for us because we can partner with them. Before we do it, we have a solution which we can go independently by ourselves. We already have pilots in the area of Orlando and New York with some small rental companies that are very satisfied. The response that we get is very, very good. I'm saying it's not something that will happen tomorrow. We are opening a new, I think, a new niche, a new segment, a new market. It's also required adaptations. I think that, let's say, the dream here is huge. There are companies that provide services to rental companies, like integrators, software companies. there are companies that provide services to rental companies like integrators software companies That's good. that's good This is, by the way, it's an advantage for us because we can partner with them. this is by the way it's an advantage for us because we can partner with them Before we do it, we have a solution which we can go independently by ourselves. before we do it we have a solution which we can go independently by ourselves We already have pilots in the area of Orlando and New York with some small rental companies that are very satisfied. we already have pilots in the area of orlando and new york with some small rental companies that are very satisfied The response that we get is very, very good. the response that we get is very very good I'm saying it's not something that will happen tomorrow. i'm saying it's not something that will happen tomorrow We are opening a new, I think, a new niche, a new segment, a new market. we are opening a new i think a new niche a new segment a new market It's also required adaptations. it's also required adaptations I think that, let's say, the dream here is huge. i think that let's say the dream here is huge

Speaker 8: Got it. Got it. Thanks. That's really great color. Maybe just touching on OpEx, what was driving the increase in operating expenses this quarter, and how should we be looking at margin expansion into next year? Got it. got it Got it. got it Thanks. thanks That's really great color. that's really great color Maybe just touching on OpEx, what was driving the increase in operating expenses this quarter, and how should we be looking at margin expansion into next year? maybe just touching on opex what was driving the increase in operating expenses this quarter and how should we be looking at margin expansion into next year

Speaker 3: If we are talking about the increase in the OpEx, the big majority of it is coming from the FX effect. That, of course, increased the absolute numbers of the OpEx. If we are talking about the margins, again, I do not see any reason that as long as we continue to increase our subscriber base, and this is exactly according to the guideline, and I am assuming next year the same, that the margins will increase as well. If we are talking about the increase in the OpEx, the big majority of it is coming from the FX effect. if we are talking about the increase in the opex the big majority of it is coming from the fx effect That, of course, increased the absolute numbers of the OpEx. that of course increased the absolute numbers of the opex If we are talking about the margins, again, I do not see any reason that as long as we continue to increase our subscriber base, and this is exactly according to the guideline, and I am assuming next year the same, that the margins will increase as well. if we are talking about the margins again i do not see any reason that as long as we continue to increase our subscriber base and this is exactly according to the guideline and i am assuming next year the same that the margins will increase as well

Speaker 8: Got it. Thank you. Maybe if I could just one more. How do you feel the subscriber momentum is performing versus your original guidance for the year? Can you give any color on where you're seeing the most traction? Got it. got it Thank you. thank you Maybe if I could just one more. maybe if i could just one more How do you feel the subscriber momentum is performing versus your original guidance for the year? how do you feel the subscriber momentum is performing versus your original guidance for the year Can you give any color on where you're seeing the most traction? can you give any color on where you're seeing the most traction

Speaker 6: As I said in my speech, is that we provide kind of guidance of 220,000-240,000. According to the nine months and the current data that we have, is that we will meet this range, which is the highest, I think, ever in the 30 years of Ituran. The drivers are absolutely across all the regions. It's included also from the OEM. It's included the aftermarket that we do in Brazil, which is including the insurance companies. It's also including the financial solution that we provide to banks. Also, with a very major influence on the subscribers that we add during 2025 is Israel. This is thanks to the requirement by insurance companies. Relatively to the cost of rate is very high. As I said in my speech, is that we provide kind of guidance of 220,000-240,000. as i said in my speech is that we provide kind of guidance of 220,000-240,000 According to the nine months and the current data that we have, is that we will meet this range, which is the highest, I think, ever in the 30 years of Ituran. according to the nine months and the current data that we have is that we will meet this range which is the highest i think ever in the 30 years of ituran The drivers are absolutely across all the regions. the drivers are absolutely across all the regions It's included also from the OEM. it's included also from the oem It's included the aftermarket that we do in Brazil, which is including the insurance companies. it's included the aftermarket that we do in brazil which is including the insurance companies It's also including the financial solution that we provide to banks. it's also including the financial solution that we provide to banks Also, with a very major influence on the subscribers that we add during 2025 is Israel. also with a very major influence on the subscribers that we add during 2025 is israel This is thanks to the requirement by insurance companies. this is thanks to the requirement by insurance companies Relatively to the cost of rate is very high. relatively to the cost of rate is very high More and more new cars, but more important is second-hand cars that in the past did not require for the policy security system. Now they require. Ituran is the first choice in Israel by far of any other security solution. This allows us to grow in 2025 dramatically as well in Israel. I will add that the UBI also has some volatility. In 2023, we did a very high growth in subscribers. In 2024, we had to expand the customers that we are approaching. In 2025, we had another large insurance company that we developed for them a solution. They also, during the second quarter of 2025, start using our UBI solution in high numbers. Overall, this is the drivers. More and more new cars, but more important is second-hand cars that in the past did not require for the policy security system. more and more new cars but more important is second-hand cars that in the past did not require for the policy security system Now they require. now they require Ituran is the first choice in Israel by far of any other security solution. ituran is the first choice in israel by far of any other security solution This allows us to grow in 2025 dramatically as well in Israel. this allows us to grow in 2025 dramatically as well in israel I will add that the UBI also has some volatility. i will add that the ubi also has some volatility In 2023, we did a very high growth in subscribers. in 2023 we did a very high growth in subscribers In 2024, we had to expand the customers that we are approaching. in 2024 we had to expand the customers that we are approaching In 2025, we had another large insurance company that we developed for them a solution. in 2025 we had another large insurance company that we developed for them a solution They also, during the second quarter of 2025, start using our UBI solution in high numbers. they also during the second quarter of 2025 start using our ubi solution in high numbers Overall, this is the drivers. overall this is the drivers

Speaker 8: Great. Great. Thanks. That's it for me, guys. Great. great Great. great Thanks. thanks That's it for me, guys. that's it for me guys

Speaker 6: Thank you. Thank you. thank you

Speaker 7: Thanks, Chris. Our next question is going to be from Allen Klee of Maxim Group. Allen, you may go ahead and ask. Thanks, Chris. thanks chris Our next question is going to be from Allen Klee of Maxim Group. our next question is going to be from allen klee of maxim group Allen, you may go ahead and ask. allen you may go ahead and ask

Speaker 5: Yes. Hi. Can you hear me? Yes. yes Hi. hi Can you hear me? can you hear me

Speaker 6: Yes. Yes. yes

Speaker 5: Yes. Oh, great. You talked about how motorcycles are important in South America and your partnership with BMW Motorrad. What are you, could you talk about kind of how you're looking at increasing the uptake in this market? Yes. yes Oh, great. oh great You talked about how motorcycles are important in South America and your partnership with BMW Motorrad. you talked about how motorcycles are important in south america and your partnership with bmw motorrad What are you, could you talk about kind of how you're looking at increasing the uptake in this market? what are you could you talk about kind of how you're looking at increasing the uptake in this market

Speaker 6: Yes. Brazil, and especially, but also the rest of Latin America, is a very motorcycles. I'm talking about mid-to-heavy engine motorcycles, which is quite an expensive vehicle, is very popular. The ratio between four-wheel drive and two-wheel drive, it's very different than, for example, in other countries in the Western world, many people using motorcycles. Ituran always has a solution, but our solution was a little bit, I would say, not reliable enough to provide insurance companies with a low premium to motorcycles. This is first. Second, even the motorcycles themselves were in a situation that they didn't want to add cost to the motorcycles. In the last two years, we developed, thanks to our innovative teams, a unit which is state-of-the-art for a security system and application for the driver on a motorbike. Yes. yes Brazil, and especially, but also the rest of Latin America, is a very motorcycles. brazil and especially but also the rest of latin america is a very motorcycles I'm talking about mid-to-heavy engine motorcycles, which is quite an expensive vehicle, is very popular. i'm talking about mid-to-heavy engine motorcycles which is quite an expensive vehicle is very popular The ratio between four-wheel drive and two-wheel drive, it's very different than, for example, in other countries in the Western world, many people using motorcycles. the ratio between four-wheel drive and two-wheel drive it's very different than for example in other countries in the western world many people using motorcycles Ituran always has a solution, but our solution was a little bit, I would say, not reliable enough to provide insurance companies with a low premium to motorcycles. ituran always has a solution but our solution was a little bit i would say not reliable enough to provide insurance companies with a low premium to motorcycles This is first. this is first Second, even the motorcycles themselves were in a situation that they didn't want to add cost to the motorcycles. second even the motorcycles themselves were in a situation that they didn't want to add cost to the motorcycles In the last two years, we developed, thanks to our innovative teams, a unit which is state-of-the-art for a security system and application for the driver on a motorbike. in the last two years we developed thanks to our innovative teams a unit which is state-of-the-art for a security system and application for the driver on a motorbike What we did first, we used our OEM capabilities and teams, and we started negotiating. As you remember, maybe the first one was with Yamaha. Yamaha is our first customer for almost two years, 18 months. Now, as we publish, we signed an OEM deal with BMW Motorrad in Brazil. The idea is that this is an untapped market for telematics solutions. We are talking about the potential of millions of motorbikes that fit these needs and can pay it compared to the price of the motorbike. We started with an OEM. This allows us to create reliability. This allows us to partner with brands. The guys of motorbikes are like sports cars. If somebody is driving a BMW, you will be very loyal. The same Honda, Yamaha, etc., specifically in Brazil. What we did first, we used our OEM capabilities and teams, and we started negotiating. what we did first we used our oem capabilities and teams and we started negotiating As you remember, maybe the first one was with Yamaha. as you remember maybe the first one was with yamaha Yamaha is our first customer for almost two years, 18 months. yamaha is our first customer for almost two years 18 months Now, as we publish, we signed an OEM deal with BMW Motorrad in Brazil. now as we publish we signed an oem deal with bmw motorrad in brazil The idea is that this is an untapped market for telematics solutions. the idea is that this is an untapped market for telematics solutions We are talking about the potential of millions of motorbikes that fit these needs and can pay it compared to the price of the motorbike. we are talking about the potential of millions of motorbikes that fit these needs and can pay it compared to the price of the motorbike We started with an OEM. we started with an oem This allows us to create reliability. this allows us to create reliability This allows us to partner with brands. this allows us to partner with brands The guys of motorbikes are like sports cars. the guys of motorbikes are like sports cars If somebody is driving a BMW, you will be very loyal. if somebody is driving a bmw you will be very loyal The same Honda, Yamaha, etc., specifically in Brazil. the same honda yamaha etc specifically in brazil We knew that partnering with a big brand in the OEM will, again, provide reliability. Now what we see is attraction also from the aftermarket. Because if someone comes to a dealer of BMW to have some treatment to the motorbike or to buy something, now he's asking or he will see that there is a solution by Ituran. We really believe that we just started. I am expecting that it will bring us tens of thousands of new subscribers starting 2026. It will grow as we will expand the segment and our customer, whether it will be B2B with other motorbike manufacturers. There are other names that we are starting to talk with. I'm not saying whether it will finish with a deal or not, but we see attraction. A major portion of this market is the second market, the aftermarket. We knew that partnering with a big brand in the OEM will, again, provide reliability. we knew that partnering with a big brand in the oem will again provide reliability Now what we see is attraction also from the aftermarket. now what we see is attraction also from the aftermarket Because if someone comes to a dealer of BMW to have some treatment to the motorbike or to buy something, now he's asking or he will see that there is a solution by Ituran. because if someone comes to a dealer of bmw to have some treatment to the motorbike or to buy something now he's asking or he will see that there is a solution by ituran We really believe that we just started. we really believe that we just started I am expecting that it will bring us tens of thousands of new subscribers starting 2026. i am expecting that it will bring us tens of thousands of new subscribers starting 2026 It will grow as we will expand the segment and our customer, whether it will be B2B with other motorbike manufacturers. it will grow as we will expand the segment and our customer whether it will be b2b with other motorbike manufacturers There are other names that we are starting to talk with. there are other names that we are starting to talk with I'm not saying whether it will finish with a deal or not, but we see attraction. i'm not saying whether it will finish with a deal or not but we see attraction A major portion of this market is the second market, the aftermarket. a major portion of this market is the second market the aftermarket This is something, again, that I believe can be very important with influence, again, on the results in two to three years from now. This is something, again, that I believe can be very important with influence, again, on the results in two to three years from now. this is something again that i believe can be very important with influence again on the results in two to three years from now

Speaker 5: Thank you. I understand that Israel is an attractive market, but not that large. You have a large opportunity in Latin America and South America. How do you think about, first, the size of the opportunity in South America? Also, is it possible over the next couple of years that there could be other geographies that might make sense? Thank you. thank you I understand that Israel is an attractive market, but not that large. i understand that israel is an attractive market but not that large You have a large opportunity in Latin America and South America. you have a large opportunity in latin america and south america How do you think about, first, the size of the opportunity in South America? how do you think about first the size of the opportunity in south america Also, is it possible over the next couple of years that there could be other geographies that might make sense? also is it possible over the next couple of years that there could be other geographies that might make sense

Speaker 6: First of all, we are not passing any opportunity. By talking about how we focus, the Latin America market, whether it's Central or South America, it's a huge market, which is, by the way, kind of an emerging market. There is still a growing segment that we couldn't penetrate, whether it's because of price, whether it's because of awareness. For us, the first online is to expand and continue expanding our business in Latin America because of the synergy that we can create, the relationship, the brand. We're still, I think, in the beginning of tapping this market. This is regarding how we focus, but in an opportunistic way. Of course, when we look at the rest of the world, we are more looking at doing it by M&A, by acquisition. First of all, we are not passing any opportunity. first of all we are not passing any opportunity By talking about how we focus, the Latin America market, whether it's Central or South America, it's a huge market, which is, by the way, kind of an emerging market. by talking about how we focus the latin america market whether it's central or south america it's a huge market which is by the way kind of an emerging market There is still a growing segment that we couldn't penetrate, whether it's because of price, whether it's because of awareness. there is still a growing segment that we couldn't penetrate whether it's because of price whether it's because of awareness For us, the first online is to expand and continue expanding our business in Latin America because of the synergy that we can create, the relationship, the brand. for us the first online is to expand and continue expanding our business in latin america because of the synergy that we can create the relationship the brand We're still, I think, in the beginning of tapping this market. we're still i think in the beginning of tapping this market This is regarding how we focus, but in an opportunistic way. this is regarding how we focus but in an opportunistic way Of course, when we look at the rest of the world, we are more looking at doing it by M&A, by acquisition. of course when we look at the rest of the world we are more looking at doing it by m&a by acquisition Because for us to start a new business from scratch, for example, in the U.K. or in Europe, it will require high resources because we have zero resources now there. Until the moment that we will turn it to major revenues and major profits, it will take a long time. At the size of Ituran, the way that we are looking at other geographies is by M&A. Of course, we are looking. It should be something that meets our DNA, meets our criteria. Our criteria is not a too small company. On the other end, a company that has assets that we can leverage, such as partners or customers, a system of employees, control centers, etc. To make the long story short, we still focus on Latin America and in the U.S., as I said. Because for us to start a new business from scratch, for example, in the U.K. or in Europe, it will require high resources because we have zero resources now there. because for us to start a new business from scratch for example in the u.k or in europe it will require high resources because we have zero resources now there Until the moment that we will turn it to major revenues and major profits, it will take a long time. until the moment that we will turn it to major revenues and major profits it will take a long time At the size of Ituran, the way that we are looking at other geographies is by M&A. at the size of ituran the way that we are looking at other geographies is by m&a Of course, we are looking. of course we are looking It should be something that meets our DNA, meets our criteria. it should be something that meets our dna meets our criteria Our criteria is not a too small company. our criteria is not a too small company On the other end, a company that has assets that we can leverage, such as partners or customers, a system of employees, control centers, etc. To make the long story short, we still focus on Latin America and in the U.S., as I said. on the other end a company that has assets that we can leverage such as partners or customers a system of employees control centers etc to make the long story short we still focus on latin america and in the u.s as i said

Speaker 5: Okay. Thank you very much. Okay. okay Thank you very much. thank you very much

Speaker 6: You're welcome. You're welcome. you're welcome

Speaker 3: Thank you, Allen. Thank you, Allen. thank you allen

Speaker 7: Our next question will be from Sergey Glinyanov from Freedom Capital Markets. Sergey, please go ahead. Our next question will be from Sergey Glinyanov from Freedom Capital Markets. our next question will be from sergey glinyanov from freedom capital markets Sergey, please go ahead. sergey please go ahead

Speaker 4: Good morning, Eyal, Udi, Eli. Can you hear me? Good morning, Eyal, Udi, Eli. good morning eyal, udi, eli Can you hear me? can you hear me

Speaker 9: Yes. Yes. yes

Speaker 3: Yeah. Yeah. yeah

Speaker 6: Yeah, yeah. Yeah, yeah. yeah yeah

Speaker 4: Great. Great. First of all, my applause to Ituran and another successful quarter. You guys beat market expectations. It was not revenue in EPS. Now I am interested in revenue dynamics. It seems your ARPU is increasing. Is it basically a product and service mix or something more fundamental as a core? Great. great Great. great First of all, my applause to Ituran and another successful quarter. first of all my applause to ituran and another successful quarter You guys beat market expectations. you guys beat market expectations It was not revenue in EPS. it was not revenue in eps Now I am interested in revenue dynamics. now i am interested in revenue dynamics It seems your ARPU is increasing. it seems your arpu is increasing Is it basically a product and service mix or something more fundamental as a core? is it basically a product and service mix or something more fundamental as a core

Speaker 3: Hi, Sergey. ARPU is going up due to the fact of the FX. FX has been better in Q3 this year. Therefore, the ARPU went up as well. Hi, Sergey. hi sergey ARPU is going up due to the fact of the FX. arpu is going up due to the fact of the fx FX has been better in Q3 this year. fx has been better in q3 this year Therefore, the ARPU went up as well. therefore the arpu went up as well

Speaker 4: Okay. And some kind of follow-up about your IturanMob in North America. Do you have any expectations about revenue next year? Okay. okay And some kind of follow-up about your Ituran Mob in North America. and some kind of follow-up about your ituran mob in north america Do you have any expectations about revenue next year? do you have any expectations about revenue next year

Speaker 6: We never provide guidance about revenues. I must tell you that we do all we can to make more revenues than this year. We never provide guidance about revenues. we never provide guidance about revenues I must tell you that we do all we can to make more revenues than this year. i must tell you that we do all we can to make more revenues than this year

Speaker 4: Yeah. Sounds great. Yeah. yeah Sounds great. sounds great

Speaker 3: Thank you. Thank you. thank you

Speaker 6: You're welcome. You're welcome. you're welcome

Speaker 4: Thank you. Thank you. thank you

Speaker 7: Thanks, Sergey. Our next question, hold on one sec. Our next question will be from Evan Tindell of Bireme Capital. Evan, you may ask your question. Thanks, Sergey. thanks sergey Our next question, hold on one sec. our next question hold on one sec Our next question will be from Evan Tindell of Bireme Capital. our next question will be from evan tindell of bireme capital Evan, you may ask your question. evan you may ask your question

Speaker 2: Hi, guys. Thanks for taking my call. My question is, I've heard that some theft insurance providers in Israel are not requiring Teslas to have your system. I was just wondering, is that true? A follow-up to that is, over 10, over like five to 10, 15 years, something like that, do you guys worry that more manufacturers will be able to sort of figure out how to do the internal telematic systems and anti-theft systems well enough to disintermediate you guys? Thanks so much. Hi, guys. hi guys Thanks for taking my call. thanks for taking my call My question is, I've heard that some theft insurance providers in Israel are not requiring Teslas to have your system. my question is i've heard that some theft insurance providers in israel are not requiring teslas to have your system I was just wondering, is that true? i was just wondering is that true A follow-up to that is, over 10, over like five to 10, 15 years, something like that, do you guys worry that more manufacturers will be able to sort of figure out how to do the internal telematic systems and anti-theft systems well enough to disintermediate you guys? a follow-up to that is over 10 over like five to 10 15 years something like that do you guys worry that more manufacturers will be able to sort of figure out how to do the internal telematic systems and anti-theft systems well enough to disintermediate you guys Thanks so much. thanks so much

Speaker 6: Okay. Just to explain how the process is specifically in Israel, because there is a regulation, in Israel, an insurance company cannot decide for their insurers or require in their policy a specific brand, a specific solution. What they allow to do is, for example, if they want to have a location unit with a real-time alert, with a 24/7 control center, that is what they put in the policy. Now, you as the insurer have to decide what company you choose. Never, never since the inception of Ituran, insurance companies did not say, "Install Ituran" or "Install other name." This is what is nice with Ituran. We are not the chosen of the insurance company. We are the chosen of a million subscribers in Israel. This is what the story is. How we do it is with our channels. The channels, in that case, are car dealers, car importers. Okay. okay Just to explain how the process is specifically in Israel, because there is a regulation, in Israel, an insurance company cannot decide for their insurers or require in their policy a specific brand, a specific solution. just to explain how the process is specifically in israel because there is a regulation in israel an insurance company cannot decide for their insurers or require in their policy a specific brand a specific solution What they allow to do is, for example, if they want to have a location unit with a real-time alert, with a 24/7 control center, that is what they put in the policy. what they allow to do is for example if they want to have a location unit with a real-time alert with a 24/7 control center, that is what they put in the policy Now, you as the insurer have to decide what company you choose. now you as the insurer have to decide what company you choose Never, never since the inception of Ituran, insurance companies did not say, "Install Ituran" or "Install other name." This is what is nice with Ituran. never never since the inception of ituran insurance companies did not say "install ituran" or "install other name." this is what is nice with ituran We are not the chosen of the insurance company. we are not the chosen of the insurance company We are the chosen of a million subscribers in Israel. we are the chosen of a million subscribers in israel This is what the story is. this is what the story is How we do it is with our channels. how we do it is with our channels The channels, in that case, are car dealers, car importers. the channels in that case are car dealers car importers Just to remind you, in Israel, there are no manufacturers. In Israel, there are car importers which represent manufacturers. Ituran has a very strong partnership relationship along the years. This is the reason why 20 years ago, Ituran was declared as a monopoly in the telematics business in Israel. This is why I can say and publish that Ituran has something like 85%-90% market share. It's saying that 10% of the industry is by other companies. For us, it's good. We have competition, but we lead the competition very, very strongly. This is regarding this question. Regarding the second question, as we proved in the OEM business in Latin America, and General Motors is a very good example. Historically, we started by selling hardware and services. Ituran always was built on a recurring revenue. Just to remind you, in Israel, there are no manufacturers. just to remind you in israel there are no manufacturers In Israel, there are car importers which represent manufacturers. in israel there are car importers which represent manufacturers Ituran has a very strong partnership relationship along the years. ituran has a very strong partnership relationship along the years This is the reason why 20 years ago, Ituran was declared as a monopoly in the telematics business in Israel. this is the reason why 20 years ago ituran was declared as a monopoly in the telematics business in israel This is why I can say and publish that Ituran has something like 85%-90% market share. this is why i can say and publish that ituran has something like 85%-90% market share It's saying that 10% of the industry is by other companies. it's saying that 10% of the industry is by other companies For us, it's good. for us it's good We have competition, but we lead the competition very, very strongly. we have competition but we lead the competition very very strongly This is regarding this question. this is regarding this question Regarding the second question, as we proved in the OEM business in Latin America, and General Motors is a very good example. regarding the second question as we proved in the oem business in latin america and general motors is a very good example Historically, we started by selling hardware and services. historically we started by selling hardware and services Ituran always was built on a recurring revenue. ituran always was built on a recurring revenue Always, we were built as a service-oriented company. For us, the hardware in the car is a tool. It's a tool to bring customers. I would say our gold medal is to have a customer for many years paying every month. For that, we don't need the hardware. We need, yes, we need a car manufacturer or in Israel, a car dealer or a shop to say, "Okay, I'm selling a car with a telematics solution, but the company that can provide the services." For example, when we talk about SVR, this is the market that we are very active, Israel, Latin America, very hostile environments. No technology will recover the car. The recovery of the car is done by people sitting in a control center, providing information to enforcement people on the field. We have intelligence. We have drones. Those things are aside from the technology. Always, we were built as a service-oriented company. always we were built as a service-oriented company For us, the hardware in the car is a tool. for us the hardware in the car is a tool It's a tool to bring customers. it's a tool to bring customers I would say our gold medal is to have a customer for many years paying every month. i would say our gold medal is to have a customer for many years paying every month For that, we don't need the hardware. for that we don't need the hardware We need, yes, we need a car manufacturer or in Israel, a car dealer or a shop to say, "Okay, I'm selling a car with a telematics solution, but the company that can provide the services." For example, when we talk about SVR, this is the market that we are very active, Israel, Latin America, very hostile environments. we need yes we need a car manufacturer or in israel a car dealer or a shop to say "okay i'm selling a car with a telematics solution but the company that can provide the services." for example when we talk about svr this is the market that we are very active israel latin america very hostile environments No technology will recover the car. no technology will recover the car The recovery of the car is done by people sitting in a control center, providing information to enforcement people on the field. the recovery of the car is done by people sitting in a control center providing information to enforcement people on the field We have intelligence. we have intelligence We have drones. we have drones Those things are aside from the technology. those things are aside from the technology As long as we can sell, and specifically in the emerging market, our technology is the state of the art. The companies, for example, that sell cars in Israel, even the Chinese companies, they are not providing communication telematic solutions, for example, in Hebrew. They are not providing the data that's relevant. They will not immigrate it for those small markets. On the other hand, in Brazil and in Mexico, we are connecting to those manufacturers from the first level. I think that for us, it's more important to provide the service to have the recurring revenues. Today, 95% of our customers, which are car dealers, car manufacturers, and any other customers, still buy our hardware. There are a few percent who choose their own hardware. For us, it's okay. For us, it's okay. As long as we can sell, and specifically in the emerging market, our technology is the state of the art. as long as we can sell and specifically in the emerging market our technology is the state of the art The companies, for example, that sell cars in Israel, even the Chinese companies, they are not providing communication telematic solutions, for example, in Hebrew. the companies for example that sell cars in israel even the chinese companies they are not providing communication telematic solutions for example in hebrew They are not providing the data that's relevant. they are not providing the data that's relevant They will not immigrate it for those small markets. they will not immigrate it for those small markets On the other hand, in Brazil and in Mexico, we are connecting to those manufacturers from the first level. on the other hand in brazil and in mexico we are connecting to those manufacturers from the first level I think that for us, it's more important to provide the service to have the recurring revenues. i think that for us it's more important to provide the service to have the recurring revenues Today, 95% of our customers, which are car dealers, car manufacturers, and any other customers, still buy our hardware. today 95% of our customers which are car dealers car manufacturers and any other customers still buy our hardware There are a few percent who choose their own hardware. there are a few percent who choose their own hardware For us, it's okay. for us it's okay For us, it's okay. for us it's okay It may grow, this percentage will grow, I agree with you, in the next decade. But still, it's not something that we see as aiming the business of Ituran. It may grow, this percentage will grow, I agree with you, in the next decade. it may grow this percentage will grow i agree with you in the next decade But still, it's not something that we see as aiming the business of Ituran. but still it's not something that we see as aiming the business of ituran

Speaker 2: Great. Thank you for that. One other question. Could you update us on your efforts in India? Great. great Thank you for that. thank you for that One other question. one other question Could you update us on your efforts in India? could you update us on your efforts in india

Speaker 6: I didn't talk about India today specifically because there were a few quarters that I mentioned this joint venture that we have in India. Since this growing market is very, very, very slow, I didn't find a reason to repeat things that I said in the past. For you, I can say we have a joint venture in India. We signed a large contract with Mercedes-Benz for commercial cars, but with low margins. The current problem in India is that the market is premature. The financial capabilities of businesses, as well as retail, are very low. We have to find very specific deals to make money. India is for the long term. India has a lot of potential, as we see it, for the future. We are the main telematics or one of the main telematics players that are on the ground. I didn't talk about India today specifically because there were a few quarters that I mentioned this joint venture that we have in India. i didn't talk about india today specifically because there were a few quarters that i mentioned this joint venture that we have in india Since this growing market is very, very, very slow, I didn't find a reason to repeat things that I said in the past. since this growing market is very very very slow i didn't find a reason to repeat things that i said in the past For you, I can say we have a joint venture in India. for you i can say we have a joint venture in india We signed a large contract with Mercedes-Benz for commercial cars, but with low margins. we signed a large contract with mercedes-benz for commercial cars but with low margins The current problem in India is that the market is premature. the current problem in india is that the market is premature The financial capabilities of businesses, as well as retail, are very low. the financial capabilities of businesses as well as retail are very low We have to find very specific deals to make money. we have to find very specific deals to make money India is for the long term. india is for the long term India has a lot of potential, as we see it, for the future. india has a lot of potential as we see it for the future We are the main telematics or one of the main telematics players that are on the ground. we are the main telematics or one of the main telematics players that are on the ground

Speaker 2: Okay. Thank you. Okay. okay Thank you. thank you

Speaker 7: Thanks, Evan. That will end our question and answer session. Eyal, if you would like to go make your concluding statement. Thanks, Evan. thanks evan That will end our question and answer session. that will end our question and answer session Eyal, if you would like to go make your concluding statement. eyal if you would like to go make your concluding statement

Speaker 6: On behalf of the management of Ituran, I would like to thank you, our shareholders, for your continued interest and long-term support of our business. We look forward to continuing our accomplishments over the next decade. If you are interested in meeting or speaking with us, feel free to reach out to our investor relations team. We end our call. Thank you and have a good day. On behalf of the management of Ituran, I would like to thank you, our shareholders, for your continued interest and long-term support of our business. on behalf of the management of ituran i would like to thank you our shareholders for your continued interest and long-term support of our business We look forward to continuing our accomplishments over the next decade. we look forward to continuing our accomplishments over the next decade If you are interested in meeting or speaking with us, feel free to reach out to our investor relations team. if you are interested in meeting or speaking with us feel free to reach out to our investor relations team We end our call. we end our call Thank you and have a good day. thank you and have a good day